of the spectrum—the flexibility of the crowd along with the stability of the in- stitutions. It is not one or the other, but rather one and the other. This will even- tually—sooner than later—be adopted not only on a corporate level, but each individual real estate transaction will have capital infusions from retail crowd investors as well as larger institutions. Having this diverse, redundant source of capital will be as essential as a steady expansion of product, and it is one that has never been far from the hearts and mission of Patch of Land. LOOKING AHEAD As we continue forth and allow “the truth” to be dictated by “the future,” real estate crowdfunding and its players will head down the path so many emerging industries have before. That fast-ar- riving future will be the truth-teller about how well crowdfunding adapts to the ongoing changes and balances needed to move forward, and whether the future after that sees such innova- tion continue. The particular of those futures may remain unseen, but it’s clear that the path ahead also remains in the hands of the crowdfunding platforms and players defining fintech and alter- native finance, in the here and now. • finance in her early career, transitioning into entrepreneurial ventures in brand development and strategic marketing across the new media, consumer products and entertainment indus- tries. Over the past three years, she has done a deep dive into the high-growth alternative finance space as CMO at Patch of Land, where she is responsible for driving brand awareness, marketing and communications strategy, and partnerships and business development. She has positioned the company as a recognized leader in real estate crowdfunding, P2RE® and marketplace lending. She is a frequent contribu- tor and presenter on these topics, as well as on topics ranging from leadership and marketing, to real estate, economics and crowdfinance. AdaPia d’Errico, chief marketing offi- cer at Patch of Land, is an entrepre- neur, investor and strategic business adviser. She worked in banking and
party—be that a lender or the end pur- chaser. And all this must be done with- out supplanting good business models based on asset-backed evaluations and economic market analyses. DIVERSIFICATION OF PRODUCT Part of how you grow to “Uber” scale is through diversification of product— not only by filling a marketplace void or delivering a new iteration of an existing product, but also by staying responsive during changing economic conditions. That same diversification is applica- ble to real estate finance products. On the debt side of real estate crowdfund- ing, platforms must expand beyond the simple yet popular, 12-month “fix-and- flip” residential loan. Companies that expect to be around through changing economic and housing cycles must develop a repertoire of lending products for each broad phase as well as for indi- vidual MSA cycles—Denver is at a dif- ferent stage than Chicago, for example, as is Los Angeles from New York. Since opportunities and needs differ by asset class too, new platforms must develop dynamic, responsive products that they can take to market quickly. DIVERSIFICATION OF FUNDING SOURCES Diversification of product is perhaps
a newer topic in RECF, while source of funding for real estate deals has been the differentiator that put RECF platforms on the map. That is to say, “crowdfunding.” That word, thanks to the JOBS Act, is transforming online private placement solicitation and in- vestment enablement. Where many RECF platforms launched on the premise—and prom- ise—of giving individual investors un- paralleled access to investment oppor- tunities, many quickly turned toward institutional funding with its promise of “faster scale,” thanks to the inherent ability for one entity to deploy tens of millions of dollars at once, instead of $5,000—or even just $100, in the case of an individual. However, institutions can quickly turn their backs if market conditions change. We’ve seen this happen with the unsecured consumer lenders and the fallout that is occurring from too much reliance on big players. Unsurprisingly, some of the “crowd- funding” platforms that changed their tune to be institutional money chasers are now turning back to the crowd. Yet it remains critical to embrace an ecosystem built on complementation, rather than one of polarity. As platforms like Patch of Land have been able to successfully illustrate, it is universally advantageous to leverage both sides
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